Opening Bell: 05.15.12

In Facebook IPO, Frenzy, Skepticism (WSJ)
Michael Belanger, a lawyer from Oklahoma City, invests his personal money in the stock market. But he will be skipping Facebook’s IPO because he thinks its valuation is totally “out of whack.” Scott Schermerhorn, chief investment officer of investment-management firm Granite Investment Advisors, says the hype around Facebook’s IPO is going to keep his firm away. “It’s a cult stock,” he says. Little of that skepticism is weighing on three investors, tracked by The Wall Street Journal since Facebook announced in February that it would go public. Jim Supple was driving with his daughter Jade last autumn, when she turned to him and said, “Daddy, can I buy some of the Facebook company?” Mr. Supple, 47, had been teaching Jade about investing in the stock market for years. He started putting money for her in stocks like eBay and Disney when she was a baby. But the request still took him aback. “How do you know about buying Facebook?” he asked. “I saw in the news that they were going to be selling parts of the company,” she responded. “Can we buy some?” Since then, Mr. Supple has been trying to find a way to take $25,000 he has saved for her college fund and purchase Facebook stock. “She doesn’t need this money for another eight years,” says Mr. Supple. “If it goes the Google route, I’ll be in good shape.”

JPMorgan Said To Weigh Bonus Clawbacks After Loss (Bloomberg)
The lender can cancel stock awards or demand they be repaid if an employee “engages in conduct that causes material financial or reputational harm,” JPMorgan said in its annual proxy statement. The company will claw back pay if it’s appropriate, said one of the executives, who asked not to be identified because no decisions have been made. The incident, which led to Drew’s retirement yesterday, may test JPMorgan’s claw-back policy amid mounting investor criticism over Wall Street pay practices and as regulators investigate the trades.

JPMorgan Moves To Protect Dimon (WSJ)
The board backs Mr. Dimon and the way he quickly admitted and sought to fix the bank’s mistakes, according to this person. “We made errors, and we are going to take care of it,” Mr. Dimon told fellow directors during a conference call last week, the person said. “This was bad thinking. This was stupid.”

Euro Chiefs May Offer Leniency to Greece (Bloomberg)
Calling talk of a Greek pullout from the euro “nonsense” and “propaganda,” Luxembourg Prime Minister Jean-Claude Juncker said only a “fully functioning” Greek government would be entitled to tinker with the conditions attached to 240 billion euros ($308 billion) of rescue aid.

Man Spends $60,000 In Custody Battle Over Dog Knuckles (CBS)
Dershowitz, 34, said he considers Knuckles to be his son, and that although he’s gone through his life savings, he said it’s worth it. In papers filed earlier this year in Manhattan state Supreme Court, Dershowitz said ex-girlfriend Sarah Brega “kidnapped” Knuckles after they broke up. Brega said Dershowitz gave her the puggle pup — half pug, half beagle. Dershowitz started the website Rescue Knux to raise money for the custody fight. For $250, contributors can play fetch with Knuckles. For $10,000, Legends of Graffiti will do a giant, personalized mural. Dershowitz made an emotional video plea and posted the following on his site: I know it might sound funny and I understand that. If it wasn’t so painful, I would be laughing too (I mean, c’mon – dognapp – really?) but this is very serious to me and I miss him a lot. Enough that I have gone into debt to retrieve him and enough that I am on here asking for your help. I need the money to keep fighting the court battle. She comes from a wealthy family that is backing her. I don’t. She keeps filing crazy, frivolous motions just knowing that I can’t afford to respond even after the judge has ruled in my favor. The courts gave me custody already but, sadly, the system is too complex and expensive to make anything that simple and easy. I need help bringing my boy home…where he belongs…for good.”

Dick Bove: No Reason to Break Up Big Banks (CNBC)
JPMorgan’s much ballyhooed $2 billion loss is no reason to ramp up regulations, noted bank analyst Dick Bove said Monday. “I don’t think there’s any reason to break up the big banks,” he told CNBC. “Particularly if a bank can earn $18 billion a year and $22 billion the next year, why in heaven’s name would you say it can’t be run?”

Sanders Sees Conflict With Dimon on New York Fed Board (Bloomberg)
Senator Bernard Sanders said he sees a conflict with JPMorgan Chase Chief Executive Officer Jamie Dimon serving on the board of directors at the Federal Reserve Bank of New York, JPMorgan’s regulator. “It is an obvious conflict of interest,” Sanders, an Independent from Vermont, said today in an e-mail response to a question from Bloomberg News. “This is a clear example of the fox guarding the henhouse.”

Chesapeake Loan Jars Bond Investors (WSJ)
“This loan was priced very attractively” for lenders, said Sabur Moini, manager of a $2.5 billion high-yield-bond portfolio at Payden & Rygel, adding that turmoil in Chesapeake’s bonds was largely “self-inflicted.” Investor confidence was shaken by the loan, he said, but it has also been dented by other factors, including controversy over CEO Aubrey McClendon’s pledging his stakes in company wells as collateral to secure loans with companies that do business with Chesapeake.

Rajat Gupta Opposes U.S. Request to Limit Defense at Trial (Bloomberg)
Prosecutors had sought to bar Gupta from speculating before the jury about the government’s motives in bringing the case. They also said evidence of Gupta’s past charitable contributions and the purported damage the case has had on his reputation aren’t relevant. “The government attempts to hamstring the defense,” Gupta’s lawyers said in a court filing today. “Mr. Gupta’s charitable activities are a large component of his background and a critical element of who he is as a person.”

Increase in Customer Base Helps Groupon Narrow Loss (AP)
Groupon said Monday that its net loss was $11.7 million, or 2 cents a share, in the January-March period. It posted a loss of $146.5 million, or 48 cents a share, in the first quarter of 2011 when it was still privately held. Excluding special items such as stock-compensation expenses, Groupon earned 2 cents a share in the latest quarter, matching Wall Street’s estimates. Revenue grew 89 percent to $559.3 million from $295.5 million a year earlier.

Cops bust man smuggling cocaine at JFK (NYP)
A drug smuggler packed his stash of cocaine inside sticks of deodorant, ink markers and hundreds of buttons — only to be busted by alert customs officers at JFK Airport who noticed a strong odor coming from his suitcase, authorities said today…The items with cocaine hidden inside included 16 markers, 17 sticks of Dove and Odorex deodorant, 24 bottles of nail polish, and about 684 buttons.

'“Can we buy some?” Since then, Mr. Supple has been trying to find a way to take $25,000 he has saved for her college fund and purchase Facebook stock.'

Mr. Supple, please contact us re; your investment in Facebook. We think Jade has shown immense vision with her investment advice, and would like to offer her a position with our wealth management group.

I'm always impressed that management says a $2 Billion "issue" is insignificant to the total value of the corporation but won't give it to you as a bonus because they have to "keep expenses under control".

Oh come on, they're supposed to just have ZERO variance? <1% move over a month isn't that absurd. Besides, they're basically just making a long bet on US credits — its basically the same as holding a portfolio of corporate bonds w/o the interest rate risk (which seems like a good idea considering rates have nowhere to go but up).

What would you instead do with $360bn where you could make an actual return and never lose 1% on the portfolio? I don't even think Madoff claimed he could pull off such a magic trick…

Is that you, Snowball? You wh*re! Out of the hands of one (former) billionaire, into a newly minted one. What has the world come to? What must we witness next… the sight of Wilbur in the hands of Eduoardo?

"Dershowitz, 34, said he considers Knuckles to be his son, and that although he’s gone through his life savings, he said it’s worth it. In papers filed earlier this year in Manhattan state Supreme Court, Dershowitz said ex-girlfriend Sarah Brega “kidnapped” Knuckles after they broke up."

Do shareholders get different treatment than clients? I thought shareholders were "partners". That's what Mr. Buffett says. I heard he's made a lot of money but lives in the same house in Omaha he bought when he got started in business. I think I saw where Jamie's spokesman has a $6 million place in the city? Is that true or am I wrong?

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The more frequently you monitor your portfolio, the more likely you are to observe a loss. This is likely to cause short-sighted decisions and could hurt your investment performance. If you are checking your portfolio more than once per quarter, you’re doing it too much.